Gilead’s Solvadi is currently the leading treatment for HCV and has proved a blockbuster for the company. In its first full quarter on the market since debuting in December, Sovaldi chalked up sales of $2.27 billion, accounting for nearly half of Gilead’s $5 billion in revenue.

Solvadi is considered to be the most effective treatment for HCV with far fewer side effects than older treatments. But it has drawn ire from health insurers and regulators because of the drug’s high cost — $84,000 for a three-month program, or nearly $1,000 a day.

Merck has secured the three HCV antivirals, which Idenix has been advancing through pre-clinical and early stage clinical development, said Bernstein. The company has several of its own HCV drugs in development, including one that recently received breakthrough therapy designation from the U.S. Food and Drug Administration.

It will still take about four to five years of work to get the drugs to market, Bernstein wrote. But “this will certainly create an overhang for Gilead’s
/quotes/zigman/72849/delayed/quotes/nls/gildGILDstock given the greater credibility and resources that Merck brings to the table, as well as the broader portfolio of combination options.”

Leerink analysts were also upbeat on the deal, describing it as a bold move that illustrates Merck’s commitment to the HCV space despite Gilead’s clear lead and the politically charged environment.

“We believe the combined portfolio could enhance Merck’s efforts to pursue remedies from Gilead going forward and allow Merck to capture royalties on sales of sofosbuvir,” a Gilead compound, they wrote.

Idenix shares rose 233% on news of the deal, pulling the shares of other companies developing HCV treatments higher with them.

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